What South Carolina expects from a new trade business

$500 for specialty work, $5,000 to build

Two boards at the Department of Labor, Licensing and Regulation split the work.

• Residential Builders Commission: residential builders when a job on a home tops $5,000, and residential specialty contractors (plumbers, electricians, HVAC, and other trades) when the job tops $500. Specialty contractors can't build additions without proper supervision, and a specialty job over $5,000 for a homeowner needs a bond. A firm offering this work also needs a certificate of authorization and a $15,000 surety bond, with narrow exceptions, so check with the Commission.
• Contractor's Licensing Board: general and mechanical contracting over $10,000, raised from $5,000 in 2023. Doing that work under anything but the exact name on your license is unlawful, and that reaches ads, site signs and contracts.

Going without a required residential license is a misdemeanor, with fines from $500 to $10,000 or jail, and you may not file a mechanic's lien or sue on the contract. The commercial side bars suits too.

Roofs paid by insurance have their own rules. Before the contract, give the owner the cancellation statement and notice form. The owner can cancel until midnight on the fifth business day after learning the claim isn't covered, and you can't require payment until then, except for emergency services the owner acknowledges in writing. You can't represent or negotiate the owner's claim, or promise to pay or rebate the deductible. A construction attorney can tell you which board covers your work.

Source: S.C. Code Title 40, Chapter 59 (Residential Builders) · S.C. Code Title 40, Chapter 11 (Contractors)

Who to call: an attorney near you

Four employees, but you still answer for subs

South Carolina's comp law doesn't apply if you regularly have fewer than four employees in the business in the state, or paid under $3,000 in total payroll the prior calendar year.

Don't stop reading there. If you take on work and hand part of it to a sub, the law makes you liable to that sub's worker as if you hired them directly. A GC who wants you on site will care about that.

The paper that protects you: if the sub told you it had coverage and you collected proof on the commission's standard form when you engaged them, you're relieved of that liability. If the sub turns out to be uninsured, you or your carrier pay first and can seek reimbursement from the Uninsured Employers' Fund. So get the form every time.

Sole proprietors and partners actively in the business can elect to be covered by notifying the insurer, once the business has eligible employees. Talk to an insurance agent who writes contractors about how your LLC or corporation counts, and whether to carry a policy before you hit four.

Source: S.C. Code Title 42, Chapter 1 (42-1-130, 42-1-360, 42-1-400, 42-1-410, 42-1-415)

Who to call: an insurance agent near you

Getting paid: 90 days, then six months from the same day

Both clocks run from the day you stop working or furnishing, and they overlap:

• Within 90 days: serve the owner and file a statement of account with the register of deeds or clerk of court in the county. Miss it and the lien is dissolved.
• Within 6 months: start your suit and file notice of pendency. Not six months from filing. Six months from your last work.

Put your license or registration number on the lien document. If you needed a residential license or registration and didn't have one, you can't file a lien at all.

Hired by a contractor and not the owner? Your lien against the owner depends on written notice to the owner of the labor or material and its amount or value, and it's capped at what the owner still owes. The statute gives no day count, so give it early. Payments the owner makes after your notice don't reduce what you can recover.

Sub-subs and suppliers to subs, watch this one: your liens can't exceed what the contractor still owes your sub unless you've sent the contractor notice of furnishing by certified or registered mail. That rule only applies if the contractor filed a Notice of Project Commencement, which has a 15-day window from the start of work. The job site then has to post a notice telling you this.

Fees cut both ways. Whoever wins the lien fight can recover costs and reasonable attorney's fees, capped at the lien. A construction attorney can set up your forms.

Source: S.C. Code Title 29, Chapter 5 (29-5-10, 29-5-15, 29-5-20, 29-5-23, 29-5-40, 29-5-50, 29-5-90, 29-5-120)

Who to call: an attorney near you

You're the consumer of what you buy

The Department of Revenue's guide says it flat out: a construction contractor is the user or consumer of everything he buys. A contractor here is anyone making repairs, alterations or additions to real property. Your purchases of building materials are retail, and you pay sales tax on them at purchase.

Bring materials in from another state for a South Carolina job and you owe use tax. You get a credit for tax you paid in the other state.

If you also sell and install goods, the state may treat you as a retailer on those sales, and the rules there are different. Have a CPA who works with contractors look at your mix.

Source: SCDOR, Chapter 16: Construction Contractors · S.C. Code Title 12, Chapter 36

Who to call: a CPA or tax pro near you

A $110 LLC with no yearly report

Filing with the Secretary of State costs $110. And unless your LLC is taxed as an S-corp, there's no annual report and no franchise tax to keep up with. That's about as simple as it gets. Elect S-corp status, though, and the annual report comes along with it.

Pass-through income lands on your state return. For tax year 2026, the Department of Revenue lists 1.99% on income under $30,000, and 5.21% minus $966 at $30,000 and up. S-corp timing is a numbers question. Bring what your business clears after your floor rate to a CPA who works with contractors.

Source: SCDOR, Individual Income Tax · S.C. Secretary of State, Online Filings · S.C. Code Title 33, Chapter 44 (LLC Act fees)

Who to call: a CPA or tax pro near you